Tafsir of Hud 11:118

{And if your Lord had willed, He could have made mankind one community}

Meaning: He could have compelled them to be people of one community—that is, one religion, which is the religion of Islam—as in His saying: {Indeed, this, your religion, is one religion} (Al-Anbiya: 92).

This statement implies the negation of compulsion. It means He did not compel them to agree upon the religion of truth; rather, He empowered them with the choice that is the foundation of religious obligation (taklif). Consequently, some chose the truth and others chose falsehood, and thus they differed.

{But they will not cease to differ * Except whom your Lord has given mercy}

Except for people whom Allah has guided and treated with gentleness, so they agreed upon the religion of truth, not differing therein.

{And for that He created them}

"That" refers to what the preceding discourse indicated and contained. It means: For that—the empowerment and the choice from which the difference arose—He created them, so that He may reward the one who chooses the truth for the goodness of his choice, and punish the one who chooses falsehood for the evil of his choice.

{And the word of your Lord has been fulfilled}

Which is His saying to the angels: {I will surely fill Hell with jinn and mankind, all together}, due to His knowledge of the multitude of those who would choose falsehood.

{And all that We relate to you of the stories of the messengers is that by which We make firm your heart. And there has come to you, in this, the truth and an instruction and a reminder for the believers. * And say to those who do not believe, "Work according to your position; indeed, we are working. * And wait; indeed, we are waiting."}